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Understanding Your Health Savings Account (HSA). Brought to you by:. What is a high-deductible health plan (HDHP)?. HDHP 2013 Limits. Maximum out-of-pocket expenses (in-network) $1,500 – Individual $ 3,000 – Family. What is a Health Savings Account (HSA)?. - PowerPoint PPT Presentation
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BROUGHT TO YOU BY:
Understanding YourHealth Savings Account
(HSA)
What is a high-deductible health plan (HDHP)?
• Intended to cover serious illness or injury • Tax free growth• IRS sets parameters on plan design • Tax free distributions (for qualified expenses)
Examples: Minimum deductible levels; no copayments for office visits
• Preventive care can be covered at 100%
Deductible varies based on plan design
After you reach the out-of-pocket maximum, the health plan pays 100% of
covered chargesHSA funds can be used for qualified medical expenses
You Pay100% of the deductible
Preventive Care covered at 100%
Health Savings Account
Health Plan PaysAfter you reach the out-of-pocket
maximum, the health plan pays 100% of covered charges
Qualified High Deductible Health Plan
Hea
lth C
are
Exp
ense
s
HDHP 2013 Limits
Maximum out-of-pocket expenses (in-network)
$1,500 – Individual
$3,000 – Family
What is a Health Savings Account (HSA)?
Tax-advantaged savings accountDesignated for medical expenses
Who is eligible to open an HSA?
You must be covered by a qualified high deductible health plan, or HDHP
You cannot be covered by another non-HDHP health care plan
You cannot be claimed as a dependent on another individual's tax return
You cannot participate in a general purpose health care FSA
Limited coverages allowed – i.e. dental, vision, LTC
Why should I establish an HSA?
Lower health insurance premiums
Tax advantages Contributions, earnings, and distributions are tax free
Flexible and portable
No “use it or lose it” rule
Savings for future
Who is eligible to contribute to your HSA?
Anyone! You Your family members Or a combination of all
Maximum annual contribution $3,250 – Individual $6,450 – Family $1,000 “catch-up” contribution (55 and older)
How is money deposited into my HSA?
Payroll deduction option
Lump sum After-tax dollars Deductible on income tax return Above-the-line deduction
When does my eligibility to contribute end?
You can no longer make contributions to your HSA if: You no longer participate in a high
deductible health plan
You enroll in Medicare Including Part A, Part B, or Part D Enrollment in Part A is automatic
at age 65 for some individuals
When do I use my HSA?
Any qualified medical expenses
No requirement to use HSA funds
What health care expenses does my HSA cover?
Doctor visitsHospital staysPrescription drugsDental expensesVision expensesAnd much more!
What health care expenses does my HSA cover?
Refer to IRS Publication 502. Child Care
Controlled Substances Nutritional Supplements
Effective January 1, 2011, HSAfunds cannot be used to purchase
over-the-counter medications.
Who manages the HSA?
YOU!!!Keep track of your HSA balance
Save all receipts
Examples of How HDHP & HSA Work
Doctor office visit Provide Insurance card at appointment Receive Explanation of Benefits Receive Bill from provider & pay directly to provider
Prescription Drug Not a copay – discounted rate Pay using your HSA card
ABC Insurance
Company
How Does This Save You Money
HDHP has:
Lower Monthly Premiums
Lower Max-Out of Pocket Limits
Premium Comparison
Coverage PPO Bi-Weekly
Deduction
HDHP Bi-Weekly
Deduction
Annual Savings
Single $60.57 $55.73 $116.16Emp. & Spouse $302.99 $278.76 $581.52Emp. & Child(ren)
$259.49 $238.73 $498.24
Family $330.45 $304.02 $634.32Med Only
Emp. & Spouse $262.05 $241.09 $503.04Emp. & Child(ren)
$224.42 $206.47 $430.80
Family $285.80 $262.93 $548.88
Max Out of Pocket
PPO Single - $2,000 Employee & Family - $4,000
HDHP Single - $1,500 Employee & Family - $3,000
Overall Savings
Coverage SavingsSingle $616.16
Emp. & Spouse $1,581.52
Emp. & Child(ren) $1,498.24
Family $1,634.32
For ONE time and ONE time only!!!
Switch to the HDHP plan for 1 year. If you don’t like it then you can switch back to the PPO next
year.
Summary
HSAs work in conjunction with a HDHP. Contributions are tax free, earnings are tax free, and
distributions are tax free if used for qualifying medical expenses. You decide how to spend your health care dollars; be a better
healthcare consumer Lower health plan premiums (the money saved can be deposited
into your HSA account!) HSA belongs to you and is portable – employees currently
contributing to Section 125 FSA could deposit that same amount in an HSA. With the HSA, there is no “use it or lose it” rule
Potential retirement savings Employee is responsible for tracking expenses, monitoring HSA
contributions/distributions
More Information
For more information, please refer to the United States Department of Treasury website:
http://www.treasury.gov/resource-center/tax-policy/Pages/Health-Savings-Accounts.aspx
Amy Spenos 544-6045